Charles Younes: Why 2020 was the year active management demonstrated its value
Record 72 managers awarded ‘Alpha’ ratings by FE Investments a year after Covid pandemic decimated markets
Prior to the Covid-19 pandemic, one of the most common questions facing the fund industry concerned the value that active fund managers were offering their investors over and above increasingly popular passive or tracker funds. In buoyant markets, investors increasingly questioned the fees charged by active managers, when passive funds appeared to be achieving the same results.
As markets collapsed a year ago, the value of active fund management really came to the fore. While passive funds were held captive to these falling markets, the best active managers were able to avoid the worst of the downside and capture the upside more quickly.